"There seems to be, in addition to the size, an intensified cohesion and collegiality among the (Republican) AGs," Abbott told Reuters. "Part of it is based on personality. Part of it is based on sense of purpose."

On March 26 Abbott won an appeal of the EPA’s rejection of the state’s permitting process for some power plants. The Fifth U.S. Circuit Court of Appeals ruled the EPA had exceeded its authority in making its ruling.

The Reuters story singles out Abbott for his role in questioning the validity today of a section of the 1965 Voting Rights Act that forces Texas and other southern states to have all changes to their voting district maps approved by the federal government.

While the Supreme Court did not directly address the issue, the court voted unanimously that the lower federal courts had overreached in redrawing district maps passed by the Texas Legislature.

Near the top of the account was a description of the president’s curlicue signature; the 22 souvenir signing pens; the blue bracelet with the word, Tedstrong, for the late Sen. Ted Kennedy, an inspiration for the reform care bill, on the president’s wrist.Nine paragraphs down, the story mentions in a single sentence a lawsuit brought by the attorneys general in a dozen states contending the bill that would become known as Obamacare was unconstitutional.

When the lawsuit wasn’t being ignored it was being dismissed by the “experts.” Doug Kendall, founder of the Constitutional Accountability Center, a liberal legal think tank in Washington, D.C., embodied what passed for analysis at the time.

“Their embarrassingly weak claims are political theater, not genuine constitutional arguments, and a waste of both taxpayer money and judicial resources,” Kendall wrote in an op-ed piece for the Detroit Free Press.

“At the center of the Florida suit is the claim that the Patient Protection and Affordable Care Act is ‘an unprecedented encroachment on the sovereignty of the states,’ and thus a violation of the Constitution's 10th Amendment. This argument should produce laughter from the bench for the simple reason that states are entirely free to rid themselves of any burdens imposed by the act by withdrawing from the federal Medicaid program.

“The act reflects the genius of our federalist system, which makes the AGs' grandstanding in this lawsuit all the more unfortunate.”

Three full days of grandstanding over a laughable bit of political theater came to a close Wednesday with the press gripping the corners of the pall in preparation for the burial of Obamacare.

Supporters of the law must now think the unthinkable, as the Washington Post said this morning. What was once thought embarrassingly weak threatens to undo what the Post calls “the most far-reaching accomplishment of the Obama presidency” and redefine the power of the federal government.

The law’s foundation, the requirement forcing every eligible American to buy insurance, happened. After a second day of brutal grilling, the conservative members of the courtweighed scrapping the entire Affordable Care Act if the majority invalidates the insurance mandate, the Wall Street Journal reported today.

Justice Ruth Bader Ginsburg on Wednesday said the court had a practical decision to make, that between “a wrecking operation” and “a salvage job,” according to the New York Times today.

To salvage the law, Justice Antonin Scalia said, would require something far more practical, heroic, frightening, something almost no member of Congress had done before casting a vote for the Affordable Care Act.

“You really want us to go through these 2,700 pages?” the Times said Scalia asked a government lawyer. “Is this not totally unrealistic? That we’re going to go through this enormous bill item by item and decide each one?”

After handling the federal health care law like Chuck Wepner, the Bayonne Bleeder, the Supreme Court today will conclude three days of arguments considering what might become of the law if the court were to invalidate the health insurance mandate.

Attorneys for Texas and the other 25 states challenging Obamacare contend the addition of millions more people to the Medicaid rolls is, in effect, federal coercion of the states, which currently share the cost of the program.

The federal government is expected to argue, to the surprise of absolutely no one with a passing acquaintance with a tax form, the states are challenging its most inviolate power - to spend our money as it sees fit.

Imagine what might happen to the entire Jenga tower of federally mandated programs if this one key block were removed, the government attorneys are expected to argue today.

The consensus among major news organizations, including the New York Times and the Post, was the Court went the full 15 rounds with Obamacare Tuesday, hammering its insurance mandate midsection.

The Wall Street Journal today suggested the flaying given the legal insurance requirement by famed swing Justice Anthony Kennedy sets up the possibility Obamacare will be struck down by a 5-4 vote of an ideologically fractured Supreme Court.

Kennedy called the mandate "a step beyond what our cases have allowed" when considering laws Congress has passed compelling Americans to participate in and fund federal programs.

The Journal conceded Kennedy seemed to side with one of the government’s key contentions, that the Affordable Care Act does not force people into an insurance transaction because all Americans have a fundamental engagement with health care.

Texas Attorney General Greg Abbott, who helped in the drafting of the court challenge, thought the Supreme Court on Tuesday heard the message from the 26 states.

“It was a very powerful day before the U.S. Supreme Court with robust questions coming from the bench,” Abbott said in a release. “The justices seemed to largely agree with the position the State has taken all along, and that is that Obamacare changes the fundamental relationship between the government and individuals, and also Obamacare is forcing people to do something that is contrary to the prior rulings of the court.”

As articulated by Attorney General Greg Abbott of Texas, the lawsuit contends the Affordable Care Act, or Obamacare, violates the Constitution by forcing Americans to engage in commerce without their consent under threat of penalty.

The legal defense for the health care law is expected to argue that the universal need for health care creates an environment in which everyone is engaged in its commerce, whether through health insurance, their own savings or at the expense of the government and the American health care system, according to a story today by the Washington Post.

Justices on Monday showed little inclination toward an argument that they withhold judgment on Obamacare until after 2014 when the insurance mandate takes effect and only after lawsuits are brought challenging the mandate and the penalties, the Wall Street Journal is reporting.

Court-appointed attorney Robert Long invoked the Anti-Injunction Act, put in place by the federal government in the 1800s to keep tax revenue flowing by giving itself the power to delay lawsuits over tax assessments.

The argument has neither the support of the authors of the health care act nor its opponents.

"I have been here to the U.S. Supreme Court multiple times, and I've never seen crowds like this,” Abbott said in a press release issued Monday. “The entire plaza around the Supreme Court is completely crowded with protesters against Obamacare and with supporters of Obamacare. This shows that this law is something that has gripped the entire nation.”

The court said it will rule whether the controversial health care overhaul violated the Constitution by forcing Americans to carry health insurance and whether the bill is illegal without the requirement, according to the Washington Post.

The Post says the court will also decide whether or not the penalty for refusing to purchase health insurance included in the health care bill constitutes a tax, a point the bill’s supporters have from the start denied.

Should the penalty be ruled a tax, the court would withhold judgment on the entire bill until penalties are levied, the story says.Texas Attorney General Greg Abbott, at the forefront of the legal challenge to Obamacare, issued a statement moments after the Supreme Court made its announcement.

"With the Supreme Court's decision to hear our challenge to ObamaCare, the federal health care law is closer to an end,” the statement said. “Given the substantial implementation costs associated with this 2,700-page law -- and the unconstitutional mandate that it will impose on all Americans -- we are pleased that the Supreme Court has moved quickly and agreed to hear this very important case.

“As the federal district court and the 11th Circuit Court of Appeals ruled in this very case, the federal government exceeded the constitutional limits of its authority by requiring all Americans to buy government-approved health insurance."

Uncertainty and partisanship over such a sweeping change in how health care is delivered and paid for played a major role in how lawmakers in Texas and elsewhere approached their own reforms.

An effort to establish a health care insurance exchange, one of the many new requirements of the health law, was crushed in the past session of the Texas Legislature by Obamacare opponents waiting on the Supreme Court.

Opponents filed more than 25 lawsuits. The Supreme Court accepted the case brought by Florida that includes Texas, two dozen other states and the National Federal of Independent Business.

Goodwill Industries of San Antonio runs one of the most successful employment programs for people with severe disabilities in the country. Managers for the AbilityOne program are fiercely protective of the more than 300 people who work for them.

The waiver exempts Goodwill for one year from those portions of the Affordable Care Act that would have added costs that would make health insurance too costly for those employees.

“If our mission is to change lives through the power of work,” Rebecca Helterbrand, a spokeswoman for Goodwill, says, “then it was going to be our goal to do whatever we have to do to maintain the same level of benefits for those working people. For us, getting that waiver was the right thing to do.”

Other Texas companies who have gotten health insurance waivers include Lexus of Austin, South Texas Implement Co. and Tomball Ford.

At the same time, should the state Senate, as is expected, pass House Bill 13, Texas will ask the U.S. Department of Health and Human Services for a much broader and more confrontational waiver. The bill, written by Rep. Lois Kolkhorst, R-Brenham, would exempt the state from the Affordable Care Act, freeing it to reform and recreate a health care system in its own image.

Tom Suehs, executive commissioner for the Texas Department of Health and Human Services, says that such a reform, beginning with a complete overhaul of Medicaid, could save state and federal taxpayers $60 billion over a five-year period. This overhaul, he says, cannot possibly be done by 2014, when most of the requirements of the Affordable Care Act must be met.

Having sat down a couple of weeks ago in Washington with Kathleen Sebelius, his federal counterpart, Suehs says he thinks Texas will get its waiver. Sebelius indicated to Suehs that the Obama administration is beginning to recognize each state’s demographic demands an individual response in its health care system.

Florida, Maine, Nevada, New Jersey, Ohio and Tennessee have been granted waivers in one form or another. Applications for Georgia, Kansas, Kentucky, Louisiana, Oregon and Vermont, are in varying stages of processing.

SUEHS

“I think they are also beginning to realize, especially in a state our size, that you’re not going to be able to change the whole system of health care in the time frame set out by the Affordable Care Act,” Suehs said. “They are talking two to three years when they should be talking about five to 10 years.”

Both Helterbrand and Suehs recognize that their seeking a way around the Affordable Care Act is not seen in a vacuum of pragmatism. The bill is the pick end of a mineral hammer, cleaving Americans cleanly along conservative and liberal, Republican and Democratic faces.

For those who support the bill, the nearly 1,400 various sorts of waivers so far given to states, businesses and labor unions are proof of the flexibility of the Department of Health and Human Services in administering the act. For opponents, the waivers are an indictment of the act itself.

Legal scholars like Philip Hamburger at Columbia University are even contending that waivers are unconstitutional, because they are permission to disobey a law granted by an agency without such authority.

“More seriously, it raises questions about whether we live under a government of laws,” Hamburger wrote in a column for National Review Online. “Congress can pass statutes that apply to some businesses and not others, but once a law has passed — and therefore is binding — how can the executive branch relieve some Americans of their obligation to obey it?”

HAMBURGER

In an interview with Texas Watchdog, Hamburger called this reaction to the Affordable Care Act “extraordinary,” a throwback to the days of English monarchy to issue decrees and then select those who must or may not follow them.

“A waiver is simply a new version of the old dispensing power -- the power of a ruler to dispense with the obligation of a law for a favored few,” Hamburger says. “Although most Americans do not know the history, many recognize the lawlessness and inequality of a government attempt simply to release selected corporations and unions from the law.

“Either the law is binding or it is not. If some are to be exempt, then all of us should be exempt.”

Gov. Rick Perry has from the start opposed the Affordable Care Act and supported a waiver. Perry supports the efforts of U.S. Rep. Paul Ryan, R- Wis., to get the federal government to make its Medicaid payments to states in the form of block grants, his spokeswoman, Katherine Cesinger, says.

Kolkhorst’s waiver bill isn’t simply an expressed desire to be free of the Affordable Care Act, but the outline for Medicaid and broader health care reform tailored to the “demographic, public health, clinical, and cultural needs of this state.”

Included in this reform is incorporating free or private-market ideas into the state programs; introducing co-payments to give participants a stake in their own coverage; promoting health savings accounts and program vouchers.

A waiver will give the state time to develop a system where Medicaid reimbursements would be made to hospitals and doctors based on favorable medical outcomes rather than the number of medical procedures done, he says.

“The Affordable Care Act and waivers are not incompatible,” Suehs says. “But the Affordable Care Act is unthinkable without Medicaid reform, and that is going to take some time.”

Waivers also offer a buffer from the challenges lurking in a 1,000-page bill that few people, including the experts, have mastered. In a state with a population nearing 26 million, 6.5 million Texans are uninsured, Suehs says. How many of those people will be added to the state’s Medicaid rolls and how much that will cost are still relative unknowns.

Many of the entities who applied for a waiver did so not knowing how the act was going to affect their insurance plans. Nursing homes, caught short, are banding together nationwide, paying lobbyists to secure waivers in a profession where one in three people who provide home care, and one in four who work in nursing homes, have no health insurance.

Medicaid and Medicare reimbursement rates currently aren’t enough for nursing home firms to offer medical coverage to employees, according to Mark Parkinson, president of the American Health Care Association, the nation’s largest trade group for nursing homes.

When asked by Texas Watchdog, Beth Martino, senior director of public affairs for the Association said, “AHCA/NCAL (National Center for Assisted Living) supports the Affordable Care Act. But during a time of economic uncertainty, we must continue to pay close attention to anything with financial impacts on the long term care profession as a whole.”

Messages left with Tim Graves, spokesman for the Texas Health Care Association, to speak to the impact of the Affordable Care Act on nursing home employees in the state were not returned.

Unreturned, too, were calls left with more than half a dozen Texas companies who have gotten health insurance waivers. Among them, Lexus of Austin for its 98 employees, South Texas Implement Co. for its 76 employees and for the 12 employees of Tomball Ford.

Goodwill of San Antonio thought it important to explain that its motivation was to make sure a crucial benefit was preserved for a deserving segment of its 474 employees.

The Affordable Care Act would be at cross purposes with another federal program, one that draws $16 million a year in federal funding and makes Goodwill the largest employer of people with severe disabilities in San Antonio, Helterbrand says.

Helterbrand says Goodwill cannot be sure what will happen at the end of the waiver year, but it will apply for another waiver, if necessary, to maintain coverage for their people.

“We don’t know what health care reform will bring in 2014, I don’t think anybody really knows,” she says. “Internally, our goal all along was to maintain our current level of coverage.”

After nearly 20 years, the mixture of idealism, challenge, regret and frustration rushes back to DeAnn Friedholm.

FRIEDHOLM

Gov. Ann Richards had appointed Friedholm director of a Medicaid program in Texas that was $1.8 billion in the hole. Although she is credited with statewide reforms that solved her first budget crisis, Friedholm sounded a note of almost helpless dread familiar to that heard for the future of Medicaid today.

“What did I see then?” Friedholm asks herself. “I saw a system that was out of control, that was going to eat everything in its path.”

The federal entitlement program with the insatiable appetite that Friedholm took over in late 1992 ate a total of $6.3 billion that year. In those years the Medicaid budget grew by about $1 billion a year. By 2009, the Medicaid hunger in Texas had grown by nearly four times to $24.6 billion, gobbling up a little more than one in every four dollars in the state budget.

The Texas Department of Health and Human Services projects the annual feeding frenzy to grow by about $3 billion in each of the next two years. Even if the Legislature passed a more austere budget for 2011-12, the percentage of state spending devoted to the health insurance program for the poor is expected to increase, albeit more slowly.

Ask anyone familiar with health care in Texas, and they can tell you why the great white shark that is Medicaid cannot be stopped. Each will provide a glimpse of a solution based on their moral, political or professional point of view.

The perspectives differ, but there is consensus that Medicaid cannot be fixed by treating it as something separate from an American health care system including Medicare and private insurance that must also be changed fundamentally.

And while passage of the Patient Protection and Affordable Care Act last year has complicated and politicized speculation on where Medicaid is going, the people who know their way around the issue say you first have to know where Medicaid went.

“I think the real question is what is it about our society and the health care system we have that puts these people into Medicaid,” says Friedholm, now the national health care reform director for the nonprofit Consumers Union in Austin. She makes no pretense of her advocacy for patients. “Medicaid is a reflection of the ills of our insurance system. Medicaid is a coverage of last resort.”

At the start, with the passage of one of President Lyndon Johnson’s sturdiest of Great Societyplatforms in 1965, Medicaid was to have been coverage of last resort for small groups of the least fortunate. Only people eligible for welfare and cash assistance, for a federal program now called Temporary Assistance for Needy Families or, in Texas, elderly or disabled people eligible for cash payments called Supplemental Security Income, could get Medicaid coverage.

Congress, however, has changed and expanded Medicaid no fewer than 30 times since then, most recently with the infusions of billions of dollars through the federal stimulus in 2009 and last year with the health care act.

For nearly 15 years Medicaid was largely the same as originally passed, an entitlement program requiring the states to provide without exception the coverage determined by Congress and to pay a share of the cost based on state per-capita income.

Then beginning in the 1980s, as outlined in the indispensable “Pink Book,” published by the Health and Human Services Commission, Congress began passing laws, nearly one every year, that required states to broaden and deepen coverage.

In 1984, Medicaid would now cover children whose low-income families did not receive direct federal cash assistance. Pregnant women and their infants would get covered.

In 1986, undocumented immigrants and the homeless would get emergency care through Medicaid.

In 1987, the federal government mandated sweeping nursing home reform.

In 1988, Congress passed the Medicare Catastrophic Coverage Act, an expansion of Medicaid to cover long-term care for the elderly and disabled not already covered by Medicare.

Stoked by federal fiat, the Medicaid caseload grew in Texas from about 750,000 in 1985 to 2.3 million a decade later. And after years of growth that could be counted in the millions, the Medicaid budget began growing first by $1 billion a year in 1991 from the year before. The $2 billion budget in 1987 grew to $9 billion in 1995.

By its nature, Medicare was a patchwork of modifications, further fragmented by implementation by 50 states and left to be carried out by doctors, hospitals and nursing homes, each comprising their own loose constituency.

“For better or for worse, we created this space where we systematically put all of our uninsurable people,” Anne Dunkelberg says.

DUNKELBERG

Dunkelberg was in the delivery room for the birth of this modern Medicaid space in Texas. After doing health care policy work for the Texas Research League, which provided policy research to the Texas Legislature, Dunkelberg agreed to help Friedholm create the first Pink Book to help lawmakers understand Medicaid.

Now the health care specialist and associate director for the Center for Public Policy Priorities in Austin, Dunkelberg says that from the start Medicaid has been about good intentions, clumsily and sloppily carried out. Like her nonprofit, Dunkelberg is an advocate for those on the receiving end of federal benefits.

When asked if something might have been done differently in the 1980s when Medicaid really took off, Dunkelberg echoed what other health care experts said about the unwieldy and disjointed nature of the entire American health care system. Medicaid, she says, is very unlikely to be fixed on its own.

“Medicaid has become so expansive and so complicated that very few people understand it, much less understand what to do about it,” Dunkelberg says. “As an advocate you see Medicaid as a problem with a price you have to pay for. That doesn’t mean we can be full of shit about fiscal responsibility.”

Market plan rejected

Mike McKinney, now the chancellor of Texas A&M University, wasn’t willing to pay the price for a problem. Once the only doctor in the Texas Legislature, McKinney used his appointment by Gov. George W. Bush as Health and Human Services commissioner in 1995 to champion managed care, getting Medicaid patients enrolled with private health maintenance organizations (HMOs) to save money and improve accountability.

McKINNEY

With cost increases slowing, McKinney outlined a plan to take the entire Medicaid system in Texas private.

While Texas embraced managed care, at a modest savings, health officials in the administration of President Bill Clinton rejected McKinney’s market Medicaid plan. A short time later, McKinney resigned.

“I’m still proud of the managed care plan, still think it was a battle worth fighting for,” McKinney says in a phone interview from his office in College Station. “I was trying to deal with a system that rewards you for volume. I wanted people to be rewarded for preventing health problems, not rewarded for doing unncessary things.”

As a member of the powerful House Ways and Means and Appropriations committees, McKinney said he learned how the state got its money and spent it. As the head of Health and Human Services, he says he learned the federal and state governments were partners in a system detached from the reality of finances.

“People, patients and physicians, don’t know what anything costs,” McKinney says. “It’s a system where nobody wants to say no and nobody wants to be told no.”

As if to provide proof, the Legislature in 2001 simplified the rules for Medicaid eligibility and allowed for a continuous six-month eligibility for children. Not coincidentally did enrollment begin a fairly steady decade-long climb to the 4 million -- or nearly one in six -- Texans who received some kind of Medicaid benefit in 2009, according to Health and Human Services. Medicaid spending shot up $2 billion, from $12.3 billion in 2001 to $14.3 billion a year later.

Added to a Medicaid growth rate churning past $3 billion a year, Legislatures in Texas and across the country are guessing in a kind of institutionalized panic what the cost will be for adding those included in the federal Affordable Care Act. The act broadens Medicaid to include all individuals and families with incomes up to 133 percent of the poverty level -- $29,726 for a family of four -- which will add an estimated 32 million new clients to the rolls by 2019, according to the Congressional Budget Office.

Embedded in those estimates is what John Holcomb calls Medicaid’s dirty little secret. Holcomb, a pulmonary specialist and chairman of the Medicaid committee for the Texas Medical Association, has been part of an American medical revolution that has seen bypasses and transplants become routine and wonder drugs killing things that once killed patients.

Texans are living longer, and the more who live longer, the greater the burden on Medicaid. Although they account for the smallest and most stable client base, the old, the disabled and the blind account for almost 60 percent of the nearly $20 billion spent on client services in 2009, according to the Health and Human Services Department.

“What we have here is a societal problem, having to decide whether to spend money on hearing tests for a 3-year-old or using some experimental drug to keep some 88-year-old alive,” Holcomb says. “We have a generation of people whose parents are in some sort of long-term care. Are we going to tell some guy that he’s going to have to lose his man cave because his mother in the nursing home has to move in with him?”

Holcomb, obviously, is in the doctor advocacy business. Still, he is blunt about the waste and fraud that Medicaid invites. None of the constituencies in the provider world - doctors, hospitals, the drug industry - seem anxious to work for a more transparent and accountable system.

Neither are doctors as willing to have the artificially low fees they are paid through Medicaid whittled further during budget years like this one, Holcomb says. “In 2000, 67 percent of doctors in Texas were willing to see Medicaid patients,” he says. “Today that figure is about 40 percent.”

Push for state control

Some groups, like the Texas Hospital Association, see salvation in incremental free-market reforms. John Hawkins, vice president for government relations with the association, says he thinks that rather than expanding Medicaid through the Affordable Care Act the federal government should have ceded some authority to the states to implement market reforms.

Those free-market ideas have taken two forms in House Bill 5 by Rep. Lois Kolkhorst, R-Brenham, and Senate Bills 7 and 8 by Sen. Jane Nelson, R-Flower Mound. Kolkhorst’s bill calls for Texas to join in a compact with other states to wrest control of their Medicaid systems from the federal government. Nelson’s is a more restrained call for changes that would reward doctors for the quality rather than the volume of their treatment.

These bills may or may not benefit from the residual bitterness over passage of the Affordable Care Act and the role of the tea parties in shaping the debates.

WOHLGEMUTH

Arlene Wohlgemuth, director of the Center for Health Care Policy at the Public Policy Foundation, says the Obama administration blundered by fattening an entitlement program that most people recognize as unsustainable with incentives for everyone involved.

“The whole system is rife with perverse incentives because it is founded on perverse principles,” Wohlgemuth says. “Medicaid is so intertwined with our health care system, services so many special interests, and has so many people dependent on it that it is a political minefield. The question is not can we reform Medicaid, it is do we reform it before or after it goes bankrupt?”

Friedholm does not disagree. She says Medicaid ought not be argued ideologically, but knows it will be anyway. She worries that the questions Wohlgemuth and others are asking sidestep a tough truth about Medicaid.

“We have to face the fact that health care, all of our health care, is out of control, and what are we going to do about it?” Friedholm says. “Fifty years ago people died. People with leukemia, cerebral palsy, old people died. They’re living today. What are we going to do to take care of them?”

Perry has a staunch ally in Rep. John Zerwas, R-Simonton, who nevertheless introduced a bill calling for Texas to create an exchange, a state-managed marketplace for health insurance. Zerwas said that although he supported repeal of the Affordable Care Act, in the event the effort to repeal it failed, Texas should not wait for the federal government to impose its version of an exchange on the state.

PERRY

Perry has not been persuaded. And as chairman of the Republican Governors Association, Politico says, his posture on exchanges and the rest of the bill carries considerable weight.

Texas, with the highest rate of uninsured in the nation, will be a high-profile example as the federal government attempts to use an exchange to bring another 6 million Texans under federal health coverage.

“Since the health care reform legislation came forward, we’ve been really clear that we oppose the bill and its mandates,” Perry’s spokeswoman Lucy Nashed told Politico. “Along that same trend, the governor has been pretty clear that we’re skeptical about implementing anything that resembles Obamacare.”

Like many conservatives, the folks at the Texas Public Policy Foundation, which began this legislative session supporting a state-developed exchange, have pulled back, not wanting to influence in any way a Supreme Court challenge to the health care act brought in Florida by 26 states, including Texas.

Arlene Wohlgemuth, director of health policy for the foundation, told Politico she suspects the governor might reverse his position should the High Court uphold the health care law in favor of some state control.

The chairman of the special House committee overseeing health care in the state budget told the Texas Tribune he thinks his health insurance exchange bill may never make it out of committee.

Zerwas’ own kind in Gov. Rick Perry's office have told him the governor wants nothing to do with his proposal, something both Perry and Lt. Gov. David Dewhurst made pretty clear back in Janaury. Both are hoping the Supreme Court will rule the health care act unconstitutional, restoring at least some of the control over public health insurance to Texas and the other states.

"I am absolutely disappointed," Zerwas told the Tribune. "I believe this is one of the most important things we can do to protect our insurance market, by putting a Texas exchange in place."

Utah and Massachusetts already have exchanges, online systems for clients to select their health insurance plans. The Massachusetts program, in particular, has been vilified for its state constriction by conservatives who favor a free market in health insurance.

Lacks Stores Inc. in Victoria got one for its 962 employees. The Nueces County Appraisal District in Corpus Christi got one for 77 workers. And South Texas Implement Co. of Seguin got one for its 60 people.

They are three of 1,040 one-year waivers so far granted by the U.S. Department of Health and Human Services to employers whose coverage does not meet the requirements of the new federal health care law, according to a solid overview today by The Hill. So far, the waivers represent exemptions for 2.6 million people, less than 2 percent of Americans who are privately insured, according to the department.

“The fact that over 1,000 waivers have been granted is a tacit admission that the health care law is fundamentally flawed,” U.S. Rep. Fred Upton, R-Mich., told The Hill.

Republicans are particularly unhappy that Health and Human Services hasn’t made it clear exactly what qualified Lacks, the Nueces County Appraisal District and South Texas Implement for waivers and hasn’t disclosed why dozens of other waivers have been rejected.

“The current lack of transparency lends credence to the perception that bureaucrats are picking winners and losers in a politicized environment where the winners are favored constituencies of the administration,” a House Committee on Oversight and Government Reform Oversight panel wrote.

The federal government has granted waivers for state-mandated plans in Florida, New Jersey, Ohio and Tennessee. This week, the department gave Maine a waiver on an administrative spending restriction. But although the department has said it has plans to allow states latitude outside of the health care act to enact their own reforms, states like Texas face slim prospects for waivers for their Medicaid plans.